A FOREIGN exchange fee that’s flummoxed hundreds of thousands of Australians — because it is levied on local products bought with Aussie dollars — is finally facing the axe.

The Australian arm of the world’s largest discount voucher website, Groupon, is preparing to ditch its Switzerland-based payments system which can lead to currency conversion charges of up to three per cent of the value of the transaction.

If the fee hits just one in five Groupon Australia customers then it could be costing purchasers a combined $1 million annually. Groupon Australia could not say what proportion of customers are stung. It does not receive the fee. The money goes to the card issuer — usually a bank.

Groupon Australia’s intention to get rid of the charge only came to light after News Corp Australia raised reader complaints with the Sydney-based company. It defended the fee saying it was refunded on request, as set out in its terms and conditions. Groupon’s Ts&Cs contain 6500 words. Only one per cent of all customers actually get a refund.

Tom Godfrey of consumer group Choice said: “Australian customers shouldn’t have to pay an extra 3 per cent to have transactions processed.”

Groupon Australia spokeswoman Amy Glancey said: “In the instance a customer incurs an international transaction fee as a result of purchasing something on Groupon, we ask them to contact us so we can reimburse the fee.

“Groupon Australia is currently in conversation with a local payment gateway provider to explore options that eliminate international transaction fees being charged,” Ms Glancey added.

Groupon customer Belinda Massey estimated the forex fee had cost her $20 over several purchases.

“I really think Groupon needs to get its act together,” Mrs Massey, an accountant from Mt Waverley in Melbourne, said. She had complained to the company and her consumer affairs authorities without any joy before asking News Corp Australia to look into the fee.

Groupon Australia is the no. 1 player $500 million-a-year local industry, with a 34 per cent share of the market, according to research firm Telsyte. Its parent company is listed on the Nasdaq stock exchange, where it is valued at $US4 billion ($A4.3 billion).

Local users of LivingSocial — another major group-buying site with an Australian subsidiary — have also complained of paying international transaction fees. But LivingSocial said this was incorrect.